Water, sewer rate hikes won’t ease, says Nenshi

Jason Markusoff, Calgary Herald03.17.2014

Calgary pays for treatment plant upgrades and new pipes with a combination of city debt, user rates and developer levies. The city had $200 million in annual infrastructure costs in the past three years, and that figure will hit $350 million per year over the next 10 years.

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After three straight years of 7.5-per-cent water rate hikes and 13.5-per-cent wastewater fee hikes, Mayor Naheed Nenshi expects council will do more of the same to pay for upcoming plant and pipe system expansions.

Council spent much of Monday in a closed-door strategic council meeting, where officials briefed them on the many growth pressures demanding $350 million of annual water and sewage infrastructure for the next 10 years — up from $200 million in the past few years.

The public won’t hear until May the target rate increases for the next four budget years, but Nenshi did predict they will be as high as they have been since 2012, when council first spiked rates by 7.5 per cent for water and 13.5 for sewage services.

“If I were a betting man, I would say similar to what you’ve seen in the past,” the mayor told reporters after the meeting.

While the rate hikes might be similar, the reason isn’t. Nenshi’s first long-term budget had to substantially raise fees to play catch-up with the city’s utility debt burden after past budgets added major plant upgrades without the rate hikes to help pay for them.

After three years of catch-up, Calgary water and wastewater fees need to keep rising rapidly because population growth and its demands on infrastructure are far exceeding past expectations.

It’s forcing Calgary to fast-track construction plans — most notably at the Bonnybrook sewage treatment plant, which needs a $117-million capacity upgrade in coming years and likely a $690-million expansion by early next decade.

“We have to build it. People are coming here. We have to accommodate them,” Coun. Andre Chabot said.

Calgary’s water and wastewater rates are separate from its property tax increases, which finance officials have said will likely also need to rise by five per cent for the next several years to meet service demands and inflation costs.

Council will set targets for both types of resident charges in May, ahead of debates on the 2015-2018 budget in November.

Coun. Shane Keating said it’s becoming more and more misleading to boast that Calgary has some of the country’s lowest property tax rates.

“We can’t use that misnomer that we have a low tax rate, because we are charging fees upon fees,” he said.

On top of rising water and sewage fees, council is looking at accelerating plans to fix stormwater drainage problems that were magnified during last summer’s flood. Green cart composting, to launch citywide in 2017, will add a new fee for Calgary homeowners.

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